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  1. #1
    PB BMW
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    04' X5 80K Miles Worth Holding on to?

    I have an 2004 X5 with 80K miles. Pretty happy with car, but am wondering if its worthy holding on to. I have a loan over $22k on it and am worried about depreciation and excessive future cost repairs. I guess is it worth holding on to? The car has had a few expensive repairs but nothing mechanical. It also recently saved me from a major car accident with its excellent dynamic stability control. Any thoughts? I know all the common car jargon but would rather hear from experienced X5 owners. Appreciate your insight.

  2. #2
    robertplattbell
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    You might be upside down....


    Check KBB.com edmunds.com and NADAguides.com for private party and trade-in prices.

    I know that my 2002 is not worth more than 12 grand, and that's being generous (Heck, I don't even have collision/comp on it anymore). Used cars are not selling well these days (despite claims by political junkies that the "cash for clunkers" program has created a "used car shortage").

    According to edmunds, depending on what model you have, the trade-in or private party sale would be equal to or less than what you owe on the loan. Ouch.

    Be wary of dealers offering to take it in trade and "pay off your loan" as all they are doing is folding over that negative equity into a new car, that you will be upside down on that as well. Many consumers play this game, jumping from car to car, with increasingly higher and higher "negative equity" all financed by higher and higher interest rate loans. With negative equity, no one is offering zero down, zero percent.

    A car this old should be OWNED by now, not have 22 grand left on the loan.... How much did you pay for the car? What you owe is about what I paid for mine (in cash) four years ago.... Ouch Ouch.

    Please don't take that as criticism - but as a good suggestion. Most Americans play this way - borrowing and spending and owning very little. They have huge incomes and consider themselves to be "rich" but actually have little in the way of real wealth. You CAN live a different type of lifestyle, one not laden with debt.

    Cars depreciate, and that's a fact of life. You can dump the car and jump onto another depreciation bandwagon and be back where you started - with the transaction costs (taxes, tags, dealer fees and profits) added in. But that is just chasing your tail, frankly.

    The best used car value is often sitting in your driveway. If the car was taken care of, it should last for easily 150,000 miles without a major repair. That is, IF it was taken care of...and you continue to take care of it. And includes everything from maintenance to driving style to how hard you slam the doors (if you want those window regulator clips to last).

    That being said, what model do you have? Manual or automatic? 3.0, 4.4 or 4.8? That affects the resale price somewhat. Also, the 3.0 is far easier to work on and live with at higher mileage. BMW sixes are wonderful machines.

    And how handy are you with tools? If your approach to any repair is "take it to the BMW dealer" this will be a costly car to own.

    At the very least, find a good independent BMW mechanic. They charge far less (often half) of what the dealer charges.

    So far, I have been able to do all repairs on this car myself (over the last 50,000 miles I have owned it). BMWs are quite easy cars to work on, if you are inclined to tinker with cars.

    I think with the battery, I am now up to maybe $400 in repairs over four years. Labor cost: Zero.

    My goal is to get at least another 50,000 out of the car, perhaps more. We'll see.

    Good Luck.

  3. #3
    PB BMW
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    Re: You might be upside down....

    Rob,

    Thanks for the note and time spent. I bought the car about two years ago with 35k miles for about 29K. I have pretty low int rate (mid 3%)and have rolled in some negative equity from previous car. I was more concerned about reliability and agree the best value sits in driveway. Its a 3.0 loaded with nav, panoramic roof, and premium items except the sport package. So it appears to be a great car and good value - I tend to drive at least 20k per year, which is why I am considering just holding on to it and pay off as I go. I can certainly postpone the negative equity for a while, unless the car is incredibly unattractive mileage wise at a certain point (I am told at 100k or so). But either way, I am negative value and certainly cars are not investments (thats why I always buy preowned). However, a preowned Highlander probably does not depreciate as much as an X5.... Any thoughts? I just hope the car is reliable in future...

  4. #4
    robertplattbell
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    Look at it this way......


    The most you will lose at this point is 22 grand, probably less. You can't lose more than you have in it, right?

    If you keep the car another 5 years, it will probably depreciate to 8-10 grand or so. So the net cost would be about 10-15 grand.

    Even if you throw in some major repairs, and it might total 22 grand (and that's assuming you have some major repairs!).

    So the worse off you could be is out the 22 grand, which is what you owe on it. Best case, you'd be out maybe 10 grand.

    If you try to sell the car, I suspect you will not get 22 grand for it (see edmunds, which seems to suggest maybe 16-18 on a good day) so you'd have to PAY to get rid of it.

    The dealer will be all-too-happy to take it in trade. He will put down that he is giving you 22 grand in trade - on paper - and pay off the loan. But he will inflate the price of the new car accordingly.

    You'd be riding a new depreciator, and lose easily 20-30 grand in depreciation in the first few years (10 grand when you drive it off the lot!). You will lose a lot more in depreciation on the new car.

    But those monthly payments will look attractive....

    What am I saying? You've been down this road before, so you know how it works. Many folks keep doing this over and over again, ballooning that negative equity over and over.

    I think it will be a reliable car. The manual transmissions are pretty robust. The automatics can be servicable if you don't beat on them and make sure they don't run low on fluid.

    Most people drive these things too hard. Launching a 5,000 lb vehicle by flooring it from a stoplight puts a lot of stress on a car.

    Treat her like you want to drive it another 100,000 miles, and chances are you'll get there.

    But even if something goes wrong, it can always be fixed. People whine on here about transfer case splines - but there is a guy in Texas who sells rebuilt cases for cheap (and installs them cheap). 3rd party mechanics are the way to go. Taking an out-of-warranty car to the dealer is a sure way to overpay.

    Living without car payments is a wonderful thing!

    Are you handy with tools? These are not hard cars to fix.... I think.

  5. #5
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    All thoughtful, logical comments.

    Now all you need is luck. I drive a lot of miles so I try to buy a pre-owned BMW coming off a lease. I did about what you did, and what Robert did, back in 2003. Bought a 2001. Still looks and drives (almost) like new. Doesn't burn a drop of oil, transmission issues, such as jerking, come and go, but its fine for now. When I got to about 80,000 I realized how much it had depreciated and thought there was no reason to start the meter over again. My former car was a 750. I kept it until it 265,000 miles, and should have given it away at 250,000, as I spent $13,000 on it the last year, mostly the ex-wife's fault. (When the electric radiator fan quits working in August and the temperature gauge is pegged on hot and all the warning lights are on, steam coming out from under the hood, you don't go sit in a McDonald's drive through with the air on.) Before that I had a 735 that I put 185,000 miles on with no problems.

    I now have 190,000 miles on the X5 with no real issues. Window regulators. But with Robert's excellent postings, I will do the next repair myself. Even if I eventually need a new transmission its still more cost effective than trading.

    Highlanders are very reliable, conservative cars. Whenever I see one its in the left lane going just under the speed limit. And if you had been in one when you had your recent avoidance, you might be shiny side down in a ditch. I just can't see driving anything but an X5, but that's just me.

    Good luck!

  6. #6
    robertplattbell
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    Knowing when to quit...


    "kept it until it 265,000 miles, and should have given it away at 250,000, as I spent $13,000 on it the last year"

    Alas, we all fall into this trap on occasion. I see it a lot in the boating world and RV world. People keep things a wee bit longer than they should and then end up spending a ton of dough fixing them, only to sell it shortly thereafter.

    It is hard to peg the "knowing when to quit" point exactly, except in hindsight.

    However, if the repair cost of a car is near its resale value, then that is one good sign.

    I guess that was my point. I think this fellow has $22,000 worth of transportation in his driveway, even if it has some major repair down the road.

    Once it gets over 150,000 miles, don't throw too much money at it...

    The problem with BMWs is even when they are ready for the wreckers, they still look so darn good. It seems a shame to "junk" a BMW that still looks good. But if the cost of repairs exceeds resale value, it is time to call it quits.


  7. #7
    IanB
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    Keep it.....

    I just purchased (2 weeks ago) an X5 4.4i that is loaded and in very good condition for $18,200 (cash) so I would definitely say that you will end up upside down, again, if you trot off to the dealership. Personally I would keep it which is what it sounds like you will be doing and just keep up with the maintenance - most of the basic maintenance is doable by the w/e mechanic and a good 3rd party mechanic should be able to help you out of the ditch when needed.

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